In a note to shareholders before next month’s annual general meeting, at which CBA will try to avoid receiving a second «strike» on executive pay, Ms Livingstone said Mr Narev’s exit from the bank was behind its decision on long-term incentive shares.

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Ms Livingstone said the board had started an «extensive» search for a replacement for Mr Narev, who will leave the bank by the end of next June.

«The board has also determined that as a result of his retirement, Ian Narev will not be eligible for a long-term incentive award this year,» Ms Livingstone said.

Last year, the board determined Mr Narev could have earned up to 55,000 incentive shares under the scheme over the coming years if he had hit the required hurdles.

CBA says it is company policy for a CEO who is leaving to miss out on this type of incentive, and it had the same approach for Mr Narev’s predecessor, Ralph Norris, when he left the bank.

Dean Paatsch of proxy adviser Ownership Matters said the move seemed «logical» but was not widespread among companies with a departing chief executive.

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«It seems an entirely logical approach given he has signalled his intention to retire. It’s a gesture that’s open to all companies, unfortunately not that many take it,» Mr Paatsch said.

CBA chief executive Ian Narev will not be eligible for long-term bonus shares this year due to his retirement. Photo: Bloomberg

At this year’s annual meeting, on November 16, Ms Livingstone will explain to shareholders changes to its remuneration policies, as it seeks to avoid receiving a second «strike» – where more than a quarter of shareholders reject the company’s remuneration report.

Ms Livingstone said that since last year’s strike, the company had undertaken a detailed review of its remuneration policies, and moved to make them more transparent. There is now a greater emphasis on financial hurdles, after a shareholder backlash last year over linking bonuses to «soft targets» such as employee engagement.

It seems an entirely logical approach given he has signalled his intention to retire. It’s a gesture that’s open to all companies, unfortunately not that many take it.

After CBA’s executives pay packets were announced in its annual report in early August, Ms Livingstone also said Mr Narev would leave the bank by the end of this financial year. She said the move was in response to «speculation» about Mr Narev’s future in the financial markets and the media.

CBA shareholders will also be voting on a resolution from a group of shareholders to «provide certainty» that the company would align itself with the goal of limiting climate change to no more than 2 degrees, in line with the Paris agreement.

CBA’s board said the shareholders held 0.0077 per cent of the company, and argued it was «inappropriate and unwise» to single out climate change as an issue that required more board attention than others.

Shareholders will also vote on former Westpac banker Robert Whitfield’s proposed board appointment, alongside the re-election of directors Andrew Mohl, Wendy Stops and David Higgins.